US sales tax and economic nexus: what triggers a filing duty

US sales tax confuses many founders because it is nothing like VAT. There is no national rate; each state sets its own rules, and a single sale into a state can, over time, create an obligation there.

1. It is state-by-state, not federal

Sales tax is administered by individual states, and sometimes by counties and cities within them. Rates, taxable items and registration rules differ, so "US sales tax" is really dozens of separate regimes you may need to track.

2. Physical and economic nexus

Physical nexus arises from people, inventory or property in a state. Economic nexus arises from your sales volume or number of transactions into a state, regardless of physical presence. Each state sets its own thresholds, and crossing one generally triggers a duty to register and collect.

3. What to do

Track your sales by state so you know when you approach a threshold, register where you have nexus, charge the correct rate at checkout, and file returns on the state's schedule. Marketplace facilitator rules may shift collection onto the platform for some sales.

Review your US sales-tax exposure with StartEase.

Official references

• IRS: Small business and self-employed
• Federation of Tax Administrators (state links)

Important: This is general educational information, not legal, tax, accounting or exchange-control advice. Rules, rates and thresholds change and depend on your circumstances — confirm the current position with a qualified professional before acting.